Obama Faces Political Risks in Emphasizing Effects of Spending Cuts

But as president, Mr. Obama is charged with minimizing the damage from the spending reductions and must steer clear of talking down the economy. A sustained campaign against the cuts by the president could become what one former aide called “a self-fulfilling kind of mess.”

As a result, Mr. Obama is carefully navigating between maximizing heat on Republicans to undo the cuts while mobilizing efforts to make sure that the steep spending cuts do not hurt Americans. His advisers acknowledge the potential political perils ahead as the president struggles to find the right kind of balance.

At his first cabinet meeting of his second term on Monday, Mr. Obama called the cuts an “area of deep concern” that would slow the country’s growth, but promised to “manage through it” while pursuing a robust agenda. It was an echo of his formulations from the White House podium on Friday, when he began to dial back the dire warnings about long lines at airports and furloughs of F.B.I. agents, to name a couple, that he had made over the past several weeks.

“I’ve instructed not just my White House but every agency to make sure that regardless of some of the challenges that they may face because of sequestration, we’re not going to stop working on behalf of the American people,” Mr. Obama said, using the formal name for the spending cuts.

The president’s approach is unlikely to satisfy Mr. Obama’s most partisan backers, who view blaming Republicans for the deep spending cuts — especially in the military — as a tantalizing opportunity for political gain. And stepping back from a battle over the cuts could allow the significantly lower spending to become the “new normal” for the federal budget.

But a high-profile focus on the cuts in the months ahead is risky, too.

If severe economic pain ultimately fails to materialize, Mr. Obama could be blamed for hyping the situation, much like his cabinet secretaries were in recent weeks. (Homeland Security Secretary Janet Napolitano, for example, was criticized for declaring the nation would be “less safe” because of furloughs of border patrol agents.)

Seeking short-term political gain with the spending cuts could also make more difficult the president’s hopes for a longer-term budget deal with Republicans on taxes and entitlement spending.

Mr. Obama’s team is keenly aware that the more he focuses on the cuts, the more he threatens to divert attention from his second-term priorities on guns, immigration and preschool.

“You can’t simply put them on hold and simply deal with this,” David Axelrod, a former top adviser to Mr. Obama, said in an interview. The danger of sounding the alarm on the sequester, he said, is that “you can so magnify the impact of it so that it becomes an even bigger self-fulfilling kind of mess.”

Mr. Obama was careful during his first term to seize on any bit of good economic news so that no one could accuse him of hurting the economy by his statements. That desire to be upbeat — as in 2010, when administration officials declared a “recovery summer” just before the economy dipped again — sometimes got him into trouble.

The question now for the president is how much to keep up the drumbeat of concern about the spending cuts in the weeks ahead.

In talking points distributed by the White House to Democratic pundits on Friday, advisers suggested focusing on how Republican refusal to accept tax increases will “threaten our national security and hundreds of thousands of middle-class jobs and our entire economy while too many Americans are still looking for work.”

But the document also urges them to make the point that it is time to turn to other issues. Former Senator Tom Daschle of South Dakota, the Democratic leader during the Clinton years and the first term of George W. Bush, said he expects the president will not spend much time talking about the cuts.

“What he has to do is say, ‘I warned you about this, it’s going to happen, it’s gradual, but at the same time, we’ve got a country to run,’ ” Mr. Daschle said. “You’re not going to hear him with much more hyperbolic rhetoric.”

Senior White House aides said as much on Friday before Mr. Obama formally signed the order putting the cuts into effect. They told reporters that sequestration cuts would not be the only thing the president talks about — or even the majority of what he talks about — in the weeks ahead.

But they said he will try to score a political point when opportunities arise.

Aides continue to bet that they will. Even without Mr. Obama’s intervention, White House officials said they expect the effect of the cuts will slowly become more visible.

Government workers will begin forced furloughs in April, air control towers in small towns will eventually close and a lack of overtime for airport security officers will make lines longer over time.

“This is a slow-roll disaster instead of a meteor hitting,” said Matt Bennett, a Clinton-era adviser and the vice president for communications at Third Way, a liberal research group. “It’s coming on slowly. You are going to see it popping up.”

But it’s also possible that the severe angst is limited to relatively small communities of interest: federal workers, defense contractors, service providers who depend on government grants. If that happens, Mr. Obama would have little leverage to use against Republicans.

“It’s imperative not to lose sight of the rest of the agenda,” said Jim Manley, a former top aide to Senator Harry Reid of Nevada, the majority leader. “They are smart enough to realize it’s a delicate balancing act.”

View the original article here

Political Impasse Forces Japan to Delay Spending

The cabinet approved a delay, through November, of 5 trillion yen ($63 billion) in public spending, most of that in tax grants for local governments and aid for universities. It was the first time since World War II that the government had delayed scheduled spending in the middle of a fiscal year, government officials said. Spending on health care, social welfare, the police and firefighters and other vital services were not affected.

The ruling Democratic Party had tried to head off a delay by trying to secure support for a bond issuance bill that would finance about 40 percent of its 92 trillion yen ($117 billion) budget for this fiscal year. But a spat with the main opposition Liberal Democratic Party over the timing of the next general election — one in which the Democrats were expected to fare poorly — prevented that bill from passing before the end of Parliament’s current session on Saturday.

The government was expected to seek a fresh compromise at a special parliamentary session, probably in October.

Addressing the nation Friday, Prime Minister Yoshihiko Noda lashed out at the opposition for holding public services hostage.

“We are being forced to delay spending to the last minute while trying to protect public livelihoods,” Mr. Noda said. “I hope the opposition shares this sense of crisis.”

Japan has been forced to rely more on government bonds to finance its spending as a weak economy depresses tax revenue and social welfare expenditures surge to support a rapidly aging population. Servicing its public debt — which is more than twice the size of its economy — has also pressured Japan’s finances, though the finance ministry says it can meet its debt obligations without the bond issuance bill.

But Japan’s central bank has already been forced to act, pumping about 2 trillion yen ($25 billion) into the market to meet an expected jump in demand as local governments face delays in getting their tax grants.

The delay also cast a shadow over Japan’s economic recovery from its earthquake and tsunami disaster. Some economists warned that the economy could shrink in the third quarter as the slowing global economy took a toll on exports and as subsidies on fuel-efficient vehicles ended.

View the original article here

Obama campaign's spending outpaces its fundraising

WASHINGTON – As Election Day approaches, President Obama is burning through campaign money faster than he can collect it — exceeding his spending pace at this stage of the 2008 contest as he expands his field operation and trades combative ads on the airwaves with Republican rival Mitt Romney.

By Susan Walsh, AP

President Obama speaks at a fundraiser in New Orleans on July 25.

By Susan Walsh, AP

President Obama speaks at a fundraiser in New Orleans on July 25.

Last month alone, Obama spent nearly $59 million through his main campaign account — $10 million more than he raised, financial reports filed late Monday afternoon show. The cost of his campaign so far: more than $325 million, not counting spending by the the Democratic Party committees aiding his re-election.

By contrast, President Bush had spent $205.4 million to retain the White House at this point in the 2004 election.

The Democratic National Committee also stepped up its spending on the president's behalf last month, burning through $32 million — more than double what the national party spent a month earlier, as it undertook fresh rounds of polling and advertising to help Obama.

The president's new investments included additional staffers. He employed 853 people in July, up from 779 a month earlier, a USA TODAY analysis shows. Romney had 326 staffers on his payroll last month, up from 272 in June.

Obama pumped more than $48 million into advertising last month, more than twice what Romney spent.

The Romney campaign has been on a winning streak when it comes to fundraising, besting Obama and Democrats for three straight months. Romney and his fundraising operation reported collecting $101 million in July, outgunning Obama and his allies by $25 million.

Since then, the Romney camp said it has raised $10.2 million online in the week after Romney's Aug. 11 announcement of Wisconsin Rep. Paul Ryan as his running mate.

Overall, Romney has spent $165.3 million through his main campaign account since the beginning of last year, but he must wait until after he is formally nominated at next week's Republican National Convention in Tampa to draw on his substantial general-election funds. In the interim, he has been helped by super PACs and other Republican-aligned independent groups, which can raise and spend unlimited amounts, but are barred from coordinating their activities with candidates.

The candidates and super PACs aiding them were required to report details of their July fundraising before midnight Monday.

Obama's spending has put increased pressure on his campaign to raise money quickly. In an e-mail to supporters last week, he implored them to give as little as $3 each, saying he was being outspent by Republicans on the airwaves by a 2-to-1 ratio in Iowa. Next week, the hunt for cash heads to Europe where actor George Clooney is scheduled to headline an Obama fundraiser in Geneva.

Other reports filed late Monday highlight the role that a handful of wealthy donors, corporations and unions play in bankrolling super PACs:

•A pro-Romney super PAC, Restore Our Future, reported raising almost $7.5 million in July. The largest donor was Texas homebuilder Bob Perry, who donated $2 million and has given $7 million total. Another $1 million came from the Renco Group, which includes AM General, maker of the military's Humvee vehicle.

Four members of the Lindner family of Cincinnati donated a combined $500,000, while three companies affiliated with the owners of The Villages retirement community in Florida donated a total of $200,000.

•American Crossroads, a Republican-aligned super PAC, raised $7.1 million in July. Texan Robert Rowling was the biggest donor, giving $2 million personally and through his company, TRT Holdings, which owns Gold's Gym International and the Omni Hotel chain.

•Priorities USA Action, a super PAC aiding Obama, lagged behind Republican groups. It raised $4.8 million in July. Donors included Philadelphia real-estate developer Mel Heifetz, who gave $1 million, and New York-based architect Jon Stryker, who contributed $750,000.

•PayPal co-founder Peter Thiel, who spent heavily to advance Texas GOP Ron Paul's president campaign, donated $1 million in July to Club for Growth Action, which has backed upstart, anti-tax candidates in GOP primaries for Congress.

•Two labor unions donated heavily last month to a super PAC working to help Democrats gain seats in the U.S. House. The House Majority PAC took in more than $760,000 in July. The International Brotherhood of Electrical Workers was the largest donor, emerged as the biggest donor to the group, giving $350,000. The International Association of Firefighters gave $250,000.

•Ending Spending Action Fund, a super PAC created by T.D. Ameritrade founder J. Joe Ricketts reported collecting nearly $400,000 last month, most of which came from Ricketts. Ricketts, a billionaire whose family owns the Chicago Cubs baseball team, was at the center of controversy earlier this year when news broke that his political operation was weighing anti-Obama ads that linked the president to the incendiary remarks of his former pastor, Jeremiah Wright. Ricketts said he rejected the proposal.

For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.

View the original article here

Record Spending by Obama’s Camp Shrinks Coffers

Since the beginning of last year, Mr. Obama and the Democrats have burned through millions of dollars to find and register voters. They have spent almost $50 million subsidizing Democratic state parties to hire workers, pay for cellphones and update voter lists. They have spent tens of millions of dollars on polling, online advertising and software development to turn Mr. Obama’s fallow volunteers corps into a grass-roots army.

The price tag: about $400 million from the beginning of last year to June 30 this year, according to a New York Times analysis of Federal Election Commission records, including $86 million on advertising.

But now Mr. Obama’s big-dollar bet is being tested. With less than a month to go before the national party conventions begin, the president’s once commanding cash advantage has evaporated, leaving Mitt Romney and the Republican National Committee with about $25 million more cash on hand than the Democrats as of the beginning of July.

Despite Mr. Obama’s multimillion-dollar advertising barrage against Mr. Romney, he is now being outspent on the airwaves with Mr. Romney benefiting from a deluge of spending by conservative “super PACs” and outside groups. While Mr. Romney has depleted much of his funds from the nominating contest, he is four weeks away from being able to tap into tens of millions of dollars in general election money. And many polls show the race to be very close.

Mr. Obama’s cash needs — he spent $70.8 million in June alone, more than half on advertising and far more than he raised — have brought new urgency to his campaign’s fund-raising efforts. His advisers have had to schedule more fund-raising trips than originally planned to big-money states like New York, according to donors involved in the effort. The super PAC supporting his campaign, Priorities USA Action, is enlisting former President Bill Clinton as a rainmaker, hoping to counter its conservative counterparts.

While Mr. Obama will also have access to general election money in September, he is unlikely to have the same spending advantage over Mr. Romney as he had during the primary season, when Mr. Romney spent much of his money battling Republican rivals.

And with August a traditionally slow month for fund-raising, Mr. Obama has bombarded his supporters in recent weeks with increasingly urgent pleas for money, mindful that he will need to drastically raise his cash intake in the coming months merely to equal his record-breaking haul from 2008.

“My upcoming birthday next week could be the last one I celebrate as president of the United States, but that’s not up to me — it’s up to you,” Mr. Obama wrote last week as the campaign’s latest fund-raising deadline and his Aug. 4 birthday approached. “This July deadline is our most urgent yet, coming after two consecutive months of being significantly outraised by Romney and the Republicans.”

Mr. Obama’s heavy expenditures — and his campaign’s pressure on bundlers to find and groom new donors — have stirred worries among other Democrats, who have long taken Mr. Obama’s financial supremacy for granted.

“There is a lot of worry that Romney’s folks are raising so much more,” said one of Mr. Obama’s top fund-raisers, who did not want to be identified as discussing internal campaign business. “I just don’t think there’s a lot of high-dollar money left on the table.”

In fact, Republicans insist that Mr. Obama will rue his spending.

“Heading into the final laps of the campaign, the Democrats will regret squandering so much of their haul early in the cycle on massive monthly overhead,” said Sean M. Spicer, a spokesman for the R.N.C.

But in interviews, party and campaign officials defended the approach of spending money to build out the campaign, saying they believed that the wisdom of Mr. Obama’s strategy would be demonstrated at the voting booth in November.

“The earlier the better,” said Adam Fetcher, an Obama campaign spokesman. “Starting a conversation with a persuadable voter months before Election Day allows us to be more effective in responding to that voter’s priorities than if they first hear from us a few weeks out. Building and maintaining our grass-roots foundation takes time and resources, but we believe those early investments will make a difference.”

But grass-roots movements do not come cheap.

Kitty Bennett and Derek Willis contributed reporting.

View the original article here

Spending by super PACs in Colorado is the dominion of Democrats - Denver Post

Joan Fitz- Gerald speaks during a candidates forum in 2008. (Daily Camera file | Paul Aiken)

Colorado's version of liberal super PACs spent nearly 150 times more money than their Republican counterparts in the last election cycle, with most of the money coming from a small circle of unions, wealthy individuals and advocacy organizations, a Denver Post analysis found.

Collaborative and well-coordinated, the groups not only funded television and radio ads, but put large amounts of money — almost $600,000 for one state Senate race — into canvassing neighborhoods, phone calls and direct mailings that often contained withering attacks on GOP opponents.

The results: In a political climate favoring Republicans, Democrats retained control of the state Senate and lost the House by only one seat. They also won the governor's mansion three months after unleashing a half-million dollars in ads targeting Scott McInnis, the stronger candidate in the GOP primary, who was pushed out of the race.

"We do what it takes to win day in and day out," said Joan Fitz-Gerald, former Colorado Senate president and current head of America Votes, a Washington D.C.-based liberal organization that coordinates election campaigns with 37 Colorado groups.

A 2010 state law required so-called super PACs — independent expenditure committees that directly advocate for or against a candidate — to disclose not only their donors, but their disbursements. The Post analyzed that data to calculate for the first time the vast disparity between Democratic and Republican independent expenditure committee spending — about $4.24 million to $28,644. Interviews with those familiar with the Democrats' operations also gave The Post a glimpse into their long-term strategy to dominate state politics.

Unless there is a drastic change over the next eight months, Republicans say they have a tough road ahead.

The party, which continues to splinter among different interest groups, also struggles to attract big donors and faces a Democratic-drawn redistricting map. And while the GOP has started to construct a political infrastructure and tapped nonprofit advocacy groups for message delivery, they remain years behind the Democrats whose vast philanthropic, political and wealthy donor network shares everything from voter files to strategy.

"We've had a lot of chiefs trying to solve a lot of problems, but they aren't well-coordinated," said Colorado GOP consultant Katy Atkinson. "We need to get fed up with losing like the Democrats did. But I don't know if Republicans have hit bottom yet."

State politics transformed

It has been eight years since four rich liberals — Pat Stryker, Tim Gill, Jared Polis and Rutt Bridges — were brought together by Al Yates, a former Colorado State University president. The group transformed state politics by funding independent political committees, which can spend unlimited amounts of money as long as they don't specifically advocate for the election or defeat of a candidate or coordinate with a candidate.

The committees — called 527s, after the section of the tax code that governs them — launched surprise attacks on a handful of vulnerable Republican legislators. When the smoke cleared, the Democrats controlled the state Senate and House for the first time in 44 years. Two years later, similar groups helped Democrat Bill Ritter get elected governor.

The 2004 strategy sessions of the so-called Gang of Four evolved into the Colorado Democracy Alliance, or CoDA, a corporation that focuses on supporting candidates, as well as coordinating and funding a network of independent groups with similar agendas. And that model was exported to other states.

"We don't stand alone in silos. We meet on a consistent basis.We understand each other's issues and how to thread them together," said Fitz-Gerald, who became the state's first female Senate president after the 2004 election.

Democrats involved with the network are unwilling to publicly share details of their strategy. Part of the strategy is not talking about it, one said. But interviews with Democrats who asked not to be identified reveal a few simple principles.

Winning is everything

To start, state races have specific plans and funding sources. That way no one relies on money trickling down from the top of the ticket. Consistent interaction and a strong political infrastructure build trust and collaboration. Losing is inevitable, so the key is to never let the pendulum swing so far that those losses can't be recouped in a better climate. And most importantly, winning is everything. Policy and ideology can never get in the way of putting a Democrat in office.

Using this framework, Colorado Democrats have been able to recruit and organize wealthy donors, as well as bridge gaps in the party, even uniting unions with what one consultant calls the "Chablis and brie crowd."

Republicans have been trying to catch up for years, said conservative Jon Caldara, but their political and financial strategy remains out-of-date.

"Republicans still have 12:00 blinking on their VCR, while Democrats are asking, 'What's a VCR?' " said Caldara, head of The Independence Institute.

Colorado Democrats leaped ahead of the GOP again in 2010 after two federal court rulings gave corporations, unions and other independent groups the right to directly influence elections. Democrats quickly set up independent expenditure groups, which can lay out unlimited amounts of money and expressly advocate the election or defeat of a candidate as long as they do not coordinate with the office-seeker. Then they transferred money from the 527s, as well as infused fresh money, into the newly created groups, The Post found by examining financial records from the two types of organizations .

Both 527s and independent expenditure groups can roll out negative ads. But a 527 is limited to stating "call your legislator and tell her to vote no" on a certain issue, while an independent expenditure group can go a step further, using what has become known as the "magic words": "vote for," "reject," "defeat" or "elect" a specific candidate.

"Those words make a difference at the point of sale. When it's the second week of October and voting starts, you want to make the most direct statement. You want to tell them exactly what to do," said Denver pollster Floyd Ciruli.

So while the GOP stuck to a beat-around-the-bush strategy, Democrats hit Republicans head on with targeted and coordinated messages.

In the end, liberal groups won 17 of the 24 legislative races they put direct advocacy money into, The Post found. Senate Majority Leader John Morse of Colorado Springs raised $163,769 for his re-election campaign. Outside groups, however, put in nearly $600,000 on his behalf. Morse won by about 340 votes.

Two other victorious Democratic Senate candidates — Jeanne Nicholson of Black Hawk and Gail Schwartz of Snowmass Village — saw independent groups put in more than $300,000 for each race. And one group, Environment Colorado, spent $200,000 for neighborhood canvassing on behalf of the Democratic candidates for governor, attorney general, state Senate and state House.

"Even when the political environment is rotten to them, (the Democrats) have the capacity to turn the tide by targeting money at the very top and at the bottom of the ticket," said Republican Josh Penry, former minority leader in the state Senate. "It should be a call to arms for conservatives who have resources and can match the effort."

In the Colorado governor's race , a liberal group called The Freedom Fund spent $500,000 in the 10 days leading up to the GOP primary for attack ads against McInnis, who was caught up in a plagiarism scandal. Even though a Post poll six weeks earlier showed McInnis ahead of his GOP opponent by 28 percentage points, he lost.

"It seemed that we were actually starting to recover a little. And then, bam! They dropped the piano on our head," said Sean Duffy, former communications director for McInnis.

The Democrat, now-Gov. John Hickenlooper, easily won the general election.

During the 2008 and 2010 elections, Democrats spent roughly 70 percent of the $23 million shelled out by all 527s. The top contributors included a handful of unions, Gill and Stryker, and, especially in 2010, a few "social welfare" organizations, known as a 501(c)4s under the tax code. They included America Votes, which gave $464,250 and Progressive Future ($425,000).

These groups are legally allowed to engage in political activities as long as it it's not their primary purpose. But they are not required to disclose their donors.

Contributors who want to shield their identities often funnel money through 501(c)4s. Nationally, these groups have been effectively utilized by the GOP, most prominently by George W. Bush strategist Karl Rove. Colorado Republicans also used these groups to put out fliers and ads in 2010 races.

""We haven't gotten big money out of politics. We've just driven it into the shadows," said Rob Witwer, former GOP state representative and co-author of "The Blueprint: How the Democrats Won Colorado (and Why Republicans Everywhere Should Care)."

In a state where current voter registration is 37 percent Republican, 32 percent Democrat and 30 percent unaffiliated, Democrats have also found other ways to use their money in a way hidden from public view. Philanthropic organizations are often responsible for voter-registration and get-out-the-vote efforts. Legally, the charities are prohibited from partisan activities. But their members can go to neighborhoods or cities, like Denver or Pueblo, that heavily lean Democratic and register voters there, Democratic sources said.

Additionally, Democrats have Catalist, a for-profit company that has an uber-voter file: demographic, political and commercial/marketing information for 280 million Americans.

President Barack Obama tapped into Catalist for his 2008 presidential race, according to The Atlantic, and Colorado Democrats say it was used for U.S. Sen. Michael Bennet's race. In the final two weeks, Democrats said, they targeted voters household by household, helping Bennet win by a narrow margin.

Also fully funded are layers of Democratic political infrastructure. Various Colorado and local chapters of national groups handle policy, opposition research, candidate recruitment, leadership and training, and media.

A news outlet does a story

A typical, hypothetical scenario might look like this: A liberal group with a nonpartisan name like Colorado First puts out a list of polluters and demands official action. A Republican running for Colorado office is on the list. Paid liberal bloggers chatter. An online liberal publication with a newspaper-like name writes an article about the candidate and his company polluting Colorado's streams. A liberal advocacy group puts out a news release, citing the group and the publication, which sound reputable to an ordinary voter. They mass e-mail the release and attach a catchy phrase to it like "Dirty Doug." At some point, the mainstream media checks out the allegations. Depending on the facts, a news outlet does a story.

Another group, or even the opponent of "Dirty Doug," uses the media story in a mail piece. And another group runs a TV or radio ad.

These types of integrated offenses were used against McInnis; Republican Bob Beauprez, a candidate for governor in 2006; then-Congresswoman Marilyn Musgrave in 2008; and countless legislative candidates.

Republicans do have their own versions of some of these groups, but they still lack disciplined coordination. Some told The Post that the "it-takes-a-village" approach adopted by Democrats just isn't in the DNA of big-money Republicans. Many come from the business community, where they have a lot of control and don't like to delegate it. Others are focused on individualism, not the collective whole, and still others only want to back groups with certain social agendas. Additionally, it's hard to get donors excited when their team is losing and struggling to recruit fresh candidates, said Republican consultant Sean Tonner.

"Big donors got mad in '06 and '08. They are tired of the same people asking for money every cycle, especially when we aren't winning," he said.

Colorado GOP chairman Ryan Call, however, said he believes Republicans this year will have sufficient resources to compete with the Democrats.

"We will be able to draw contrasts," he said. "We're going to be aggressive under the First Amendment."

Karen E. Crummy: 303-954-1594 or kcrummy@denverpost.com; twitter.com/karencrummy

View the original article here

Hey Democrats -- To Cut Spending You Actually Have to Cut Spending (ContributorNetwork)

COMMENTARY | When will Democrats learn that cutting spending means they have to cut spending?

Congress is playing chicken with a stopgap funding bill that will continue to fund the Federal Emergency Management Agency and other disaster-relief agencies through the end of the fiscal year, which ends on Sept. 30. Competing bills offered in each house differ in the amount of supplemental funding as well as whether that funding should be paid for with spending cuts in other areas or whether it should be simply added to the debt.

Senate Majority Leader Harry Reid, D-Nev., has crafted a $7 billion package and moved it through the Senate with the help of several conservative Republicans. Whether he will be able to count on their support as the Congress reconciles the differences between Reid's bill and the House-approved measure is uncertain, but Reid appears ready to rumble with his political opponents over it.

"We're not going to cave in on this," Reid said according to an Associated Press report.

Nice approach to compromise there, senator.

Disasters cannot be predicted, of course, and the federal government has an obligation to assist whenever possible, but the spending cannot come without cost. Whether the level of supplemental funding is $3.5 billion as proposed by the House or $7 billion as the Senate suggests is irrelevant. Congress always will appropriate whatever is needed in times of disaster. The point here is that it should not be added to the deficit to accomplish it.

For too long, the federal government has just borrowed money whenever needed with no consideration to how it would be paid back. This "$3 billion here, $7 billion there" attitude over the decades has painted us into the debt corner we are faced with today. The days of making the easy decision to simply borrow the money are over. It's time for the difficult choices.

There is definitely a need for additional disaster funding, especially after the wide-spread catastrophes that hit Joplin, Mo., earlier this year, plus the hurricane damages that struck the East Coast and Gulf regions. Whatever added funds Congress may add to disaster relief need to be offset in some other area of the federal budget. It's what the American people have to do when they face an unexpected expense and it's high time to federal government learns to do the same.

View the original article here

House kills spending bill with disaster aid (AP)

WASHINGTON – In a rebuke to GOP leaders, the House on Wednesday rejected a measure providing $3.7 billion for disaster relief as part of a bill to keep the government running through mid-November.

The surprise 230-195 defeat came at the hands of Democrats and tea party Republicans.

Democrats were opposed because the measure contains $1.5 billion in cuts to a government loan program to help car companies build fuel-efficient vehicles. For their part, many GOP conservatives felt the underlying bill permits spending at too high a rate.

The outcome sends House Speaker John Boehner, R-Ohio, and his leadership team back to the drawing board as they seek to make sure the government doesn't shut down at the end of next week. It also raises the possibility that the government's main disaster relief program could run out of money early next week for victims of Hurricane Irene and other disasters.

Earlier Wednesday, Rep. Eric Cantor of Virginia, the No. 2 Republican in the House, had confidently predicted the measure would pass.

The Federal Emergency Management Agency has only a few days' worth of aid remaining in its disaster relief fund, lawmakers said. The agency already has held up thousands of longer-term rebuilding projects — repairs to sewer systems, parks, roads and bridges, for example — to conserve money to provide emergency relief to victims of recent disasters.

The looming shortage has been apparent for months, and the Obama White House was slow to request additional money.

The White House, a vigorous advocate of greater fuel efficiency for U.S.-made cars, welcomed the result of Wednesday's vote.

"We are pleased that the House of Representatives today rejected efforts to put politics above the needs of communities impacted by disasters," the White House communications director, Dan Pfeiffer, announced on his Twitter account.

The underlying stopgap funding measure would finance the government through Nov. 18 to give lawmakers more time to try to reach agreement on the 12 unfinished spending bills needed to run government agencies on a day-to-day basis for the 2012 budget year.

Forty-eight Republican broke with GOP leaders on the vote; six Democrats voted for the measure. Some of the Republicans also came from manufacturing states like Michigan, which benefit from the loan program.

The measure was originally designed by GOP leaders to pass with bipartisan support. Last week, Democratic Whip Steny Hoyer of Maryland and Rep. Norm Dicks of Washington, the top Democrat on the House Appropriations Committee, said publicly that they would vote for it reluctantly.

The underlying stopgap measure was opposed by conservative Republicans unhappy with the spending rates set by the measure, which are line with levels set by last month's budget and debt pact with President Barack Obama. That measure provides about 2 percent more money for Cabinet agency budgets than Republicans proposed when passing a nonbinding budget plan in April. More than 50 Republicans recently wrote to Boehner calling on him to stick to the earlier GOP budget.

"This bill was designed to pass with Democrat votes, in part based on assurances from Reps. Dicks and Hoyer," said Erica Elliott, spokeswoman for GOP Whip Kevin McCarthy of California. "Frankly, it's shocking as many Republicans voted for it as did."

Senate Democrats, who muscled through a stand-alone $6.9 billion disaster aid measure last week, called upon House GOP leaders to add additional disaster funding to whatever future stopgap measure rises from the rubble of Wednesday's vote. Unless Congress passes stopgap legislation by midnight on Sept. 30, much of the government will shut down.

"Consider making the disaster relief more robust" in the next bill, said Sen. Mary Landrieu, D-La. "Please talk to the Democrats."

Landrieu said FEMA Director Craig Fugate told her Wednesday that the agency's disaster relief fund may run dry on Tuesday. That would mean that there's no money to provide shelter, cash assistance or other help to victims of Irene, thousands of fires across Texas and northeastern states flooded by Tropical Storm Lee.

In the House, Democrats rallied against the measure because of the accompanying $1.5 billion in cuts to an Energy Department program that subsidizes low-interest loans to help car companies and parts manufacturers retool factories to build vehicles that will meet new, tougher fuel economy standards.

Democrats say cutting the loan program could cost up to 10,000 jobs because there wouldn't be enough money for all pending applications.

They estimated that $3.5 billion of loan subsidies has supported loans totaling $9.2 billion that created or saved 41,000 jobs in Tennessee, California, Indiana, Michigan, Delaware, Illinois, Kentucky, Missouri and Ohio. Ford Motor Co. and Nissan Motor Co. have already received loans; Chrysler Group LLC is awaiting final approval of a loan.

Republicans countered that $4 billion remains in the loan fund, plenty to tackle the 11 loan applications closest to being approved. They also noted that Democrats didn't complain loudly when identical cuts sailed through the House when it passed the FEMA budget in June as part of a homeland security spending bill.

"The loan program ... has had excess funds for years," said House Appropriations Committee Chairman Harold Rogers, R-Ky. "All entities in final loan stages will still get the funding they've worked for."

For his part, Dicks said he was persuaded by fellow Democrats that fighting against the loan program cuts was worth the risk of taking down the must-pass stopgap measure.

"Our people feel very strongly about it. It has created jobs," Dicks said in an interview. "It's working, and so they want us to fight against (the cut)."

View the original article here

Democrats catching up in election spending race (Reuters)

WASHINGTON (Reuters) – Democrats, badly outspent in congressional elections last year, fired their first shot on Wednesday against conservative groups in the advertising wars running up to the 2012 presidential election.

Priorities USA, a new political fundraising group run by a former aide to President Barack Obama, will spend $750,000 on its first television advertising in politically vital states like Iowa and Florida to help re-elect Obama.

Democrats were outgunned by tens of millions of dollars by Republican-backed independent groups at the midterm elections last year when Republicans won control of the House of Representatives.

They now appear to be catching up. Priorities is expected to report in coming days having pulled in some $4 million to $5 million in its first two months of operations, according to the group. Republican-backed American Crossroads reported last week that it took in $3.8 million since January.

"Democrats will not let (the) secret cash onslaught go unanswered this time," former Obama aide Bill Burton said in a tweet announcing the advertising push on Wednesday.

Priorities USA is the Democrats' answer to groups like American Crossroads, conceived in part by Republican operative Karl Rove, and Americans for Prosperity, backed by conservative billionaire brothers Charles and David Koch, owners of Koch Industries.

An arm of Crossroads fired the opening salvo earlier this month by investing $5 million of a planned $20 million in what it called a "massive advertising blitz" to blast Obama over the fledgling economic recovery. The group's goal is to spend $120 million during the 2012 cycle.

"We are admittedly late to the game here," Burton told Reuters.

Technically speaking, 'independent groups' are typically partisan but can have no formal coordination with political campaigns, and are subject to much looser spending and disclosure rules.

Such outside spending dwarfed funding by the Republican and Democratic parties and some campaign finance advocates say played a key role in unseating certain Democratic incumbents in 2012.

Spending by these partisan organizations is not new but Republican-backed groups took it to a new level last year, in part because of the U.S. Supreme Court's "Citizens United" ruling in 2010 that killed limits on corporate spending on independent broadcasts.

Spending by these outside groups jumped 130 percent to $280 million in 2010 from two years earlier, according to George Washington University's Campaign Finance Institute.

The group noted that these numbers are understated, since some spending is not subject to public reporting.

Republicans took the lead with $185 million in outside spending, with Democrats spending $87 million.

"There is no greater threat to our majority than the deep pockets and nasty tactics of Karl Rove, the Koch Brothers and their network of corporate-backed special interest groups," Senate Majority Leader Harry Reid said in an email last week seeking donations to back Majority PAC, another independent spending group.

Majority PAC, started in part by a former aide to Reid, is devoted to keeping the Senate Democratic, and House Majority PAC seeks to take back the House. A fourth group called American Bridge is charged with rapid-fire opposition research.

American Bridge will "track" candidates at Republican campaign events for video that could be used in advertising.

(Reporting by Kim Dixon; Editing by Eric Walsh)

View the original article here